The judiciary, in multiple instances, has reinforced that participation in a tender process does not confer an automatic right to secure the contract. This stance has been reiterated by the Telangana High Court, which recently dismissed an appeal concerning road-widening tenders for upcoming events and temple town development. The court's observation aligns with previous rulings that emphasize the discretion of authorities in awarding contracts, irrespective of a bidder's prior involvement or perceived qualifications.
The Telangana High Court, through a division bench comprising Chief Justice Aparesh Kumar Singh and Justice GM Mohiuddin, heard an appeal against a single judge's ruling. The petitioner, a construction firm from Karimnagar, had challenged tenders for road development linked to the Godavari Pushkaralu and Vemulawada temple town. The firm argued that revised tenders increased contract values while drastically reducing completion timelines. The petitioner contended there were no allegations of bad faith, arbitrariness, or tailored conditions favouring specific entities.
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Previously, the Patna High Court dismissed a writ petition challenging the cancellation of a road tender. This decision referenced Supreme Court precedents, including judgments concerning the W.B. State Electricity Board case. The court affirmed that a bidder in the L-2 position, or any position other than the lowest bidder (L-1), has no enforceable right to the contract. It was noted that tender conditions, particularly Clause 33, and subsequent attempts to match L-1 rates do not override established tender rules.
In a separate matter, the Tamil Nadu government assured the Madras High Court that no contract would be awarded for the six-lane elevated road project on the East Coast Road (ECR) pending the resolution of an appeal against tender rejection. The court permitted the challenging company to file an appeal with the government, which was directed to make a decision within a stipulated timeframe.
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Background:
These legal contests often revolve around the interpretation of tender conditions and the powers vested in tendering authorities. While companies invest resources in preparing bids, courts have consistently held that the process is not a guarantee of award. The legal framework generally allows for cancellations or modifications under specific circumstances, provided such actions are not demonstrably arbitrary or mala fide. The scale of such projects, exemplified by a contract amount of Rs.446.9 crores for a highway project with a 30-month completion period, underscores the significant financial stakes involved in these disputes.